Oil prices continue to decline under pressure from increased production by "OPEC+" and economic fears

Global oil markets witnessed a notable decline in prices during trading on Monday, August 4, driven by the "OPEC+" alliance's decision to increase production alongside investors' fears of an economic slowdown in the United States, the world's largest oil consumer.

Brent crude recorded a decrease of 23 cents to settle at $69.44 per barrel, while West Texas Intermediate crude fell 17 cents to reach $67.16 per barrel, following previous losses nearing two dollars per barrel at the end of last week's trading.

This decline came after the "OPEC+" alliance announced an increase in its production by 547,000 barrels per day during September, in a move aimed at boosting the alliance's market share. The alliance attributed its decision to improvements in global economic indicators and a decrease in oil inventory levels.

On the other hand, analysts at "Goldman Sachs" predicted that the actual increase in oil supplies would be about 1.7 million barrels per day, equivalent to two-thirds of the announced quantity, due to some members of the alliance being unable to meet their assigned production quotas. The bank noted in a report that the "OPEC+" alliance may resort to freezing production levels after September given the current geopolitical conditions, especially with expectations of increased oil supply from outside the organization.

Commenting on market developments, RBC Capital Markets analyst Halima Croft stated that "betting on the market's ability to absorb additional supplies has proven successful for countries with excess production capacities during this current summer."

Additionally, the oil sector continues to face significant challenges due to Western sanctions imposed on Russia and Iran, with experts warning of potential impacts on global supplies if those sanctions are tightened. U.S. President Donald Trump recently threatened to impose a 100% tariff on Russian oil imports in an attempt to pressure Moscow to end its military operations in Ukraine.

In a related context, trade sources reported a change in the course of two tankers carrying Russian oil that were en route to India, following the announcement of new U.S. sanctions. However, Indian officials confirmed that their country would continue to import Russian oil regardless of U.S. threats.